Assume that you are nearing graduation and have applied for a job with a local bank. As part of the bank's evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses time value of money analysis. See how you would do by answering the following questions. Draw time lines for: (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4.
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- Draw time lines for: (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary
annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4.
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- Assume that you are nearing graduation and have applied for a job with a local bank. As part of the bank's evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses time value of money analysis. See how you would do by answering the following questions. Draw time lines for (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4. What is the future value of an initial $1000 after 5 years if it is invested in an account paying 5% annual interest? What is the present value of $1000 to be received in 4 years if the appropriate interest rate is 5%? We sometimes need to find out how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales for 2020 is $1000 and expected to grow…TIME VALUE OF MONEY ANALYSIS You have applied for a job with a local bank. As part of its evaluation process, you must take an examination on time value of money analysis covering the following questions: a. Draw time lines for (1) a $100 lump sum cash flow at the end of Year 2:01an ordinary annuity of $100 per year for 3 years; and (3) an uneven cas Graphical user interface, text, application $50 at the end of Years 0 through 3. b. (1) What's the future value of $ al compounding? (2) What's the prosent value of $ Description automatically generated strate is 10%, annual compounding? C. d. e. What annual interest rate would cause $100 to grow to $125.97 in 3 years? If a company's sales are growing at a rate of 20% annually, how long will it take sales to double? What's the difference between an ordinary annuity and an annuity due? What type of annuity is shown here? How would you change it to the other type of annuity? 1 0 ㅏ 2 + $100 0 3 1 $100 $100 f. (1) What is the future value of a…There is an investor stating they will pay out $84,000 at the end of 4 years. In order to invest into the opportunity, you'll need to make a deposit of $10,000 to thier indicated bank account. What is the average annaul return rate. Use excel functions to indicate your steps.
- A bank is considering offering a loan of $100,000 to a client. If the loan is not offered, then the bank invests the $100,000 receives a sure payoff from the investment of $200 (i.e., receives $100,200 at the end of the year). Prior to a decision of whether or not to offer the loan, the bank can run a credit analysis on the client that returns one of two possible predictions: (1) the client will default on the loan in which case the bank would lose $100,000, (2) the client will pay back the loan with interest in which case the bank receives a payoff of $6,000 (i.e., receives $106,000 at the end of the year). The probability that the credit analysis will return the first prediction (client defaults) is 1%. What is the EVPI?Assume that your team is in business and you must borrow $6,000 cash for short-term needs. You have been shopping banks for a loan, and you have the following two options. A. Sign a $6,000, 90-day, 10% interest-bearing note dated June 1. B. Sign a $6,000, 120-day, 8% interest-bearing note dated June 1. Required 1. Discuss these two options and determine the better choice. Ensure that all teammates concur with the decision and understand the rationale. 2. Each member of the team is to prepare one of the following journal entries. a. Option A—at date of issuance. b. Option B—at date of issuance. c. Option A—at maturity date. d. Option B—at maturity date. 3. In rotation, each member is to explain to the team the entry he or she prepared in part 2. Ensure that all team members concur with and understand the entries. 4. Assume that the funds are borrowed on December 1 (instead of June 1) and your business operates on a calendar-year reporting period. Each member of the team is to prepare…Suppose you are a relationship manager at an international bank. A customer who recently got admission at a prestigious Business School approached you for an education loan of Rs. 36,00,000. Your bank offers the education loan at 9.6 percent to be repaid in 10 years in EMIs. You are assigned the task of preparing the amortization schedule for the customer and answer the following. Prepare the amortization schedule for the first 5 EMIs. What will be interest paid for 93th EMI? What will be the loan balance after 93th EMI? What is the total interest paid for the loan?
- For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) asingle amount or an annuity, (2) the table you would use in your computations (but do not solve the problem),and (3) the interest rate and time periods you would use. A sweepstakes agency names you a grand prize winner. You can take $225,000 immediately or elect to receive annual installments of $30,000 for 20 years. You can earn 10% annually on any investments you make. Which prize do you choose to receive?For the following economic calculations, write the factors (multipliers) that should be used,in (i) using the parameter values, and in (ii) calculate the result by showing your computations. Write the results you find in the spaces left. (Use factors for your calculations.)EXAMPLE: If you deposit $ 100 to a bank account that earns 8% annual interest, how much money will you have in this account after five years?(i)(F/P, 8%, 5) (ii)146.93100 * (F/P, 8%, 5) = 100 * 1.4693 = 146.93 TLa. You plan to take a credit with $1500 installment size per year with an annual interest rate of 8% over six years from a bank. What is the amount of your current credit?(i) (ii)b. A bank is required to deposit money for four years with an interest rate 10%. The money deposited at the end of the first year is 6000 TL and the amount of money deposited in the next three years will be reduced by 500 TL every year. How much money will be in the bank at the end of the fourth year?(i) (ii)You open an account where you deposit $500 today. Further, you deposit $800 at the beginning of next year, withdraw $250 at the beginning of year two and deposit $450 at the beginning of year 3. The return for year 1 is 6%, for year 2 it is -8%, for year 3 it is 4.5% and for year 4 it is -2%. What is your dollar-weighted or money-weighted return (in percent) for the four-year period? Answer to two decimals. O -1.45 -6.95 -11.92
- An investor has accumulated $4,450 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $7,450. Required: a. Calculate the amount of return the investor would earn if the $4,450 were invested for one year at 9%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $7,450 were invested for one year at 11%. c. Calculate the net rate of return on the investment of $4,450 if the investor accepts the strategy of part b. Note: Round your answer to 2 decimal places. a. Amount of return b. Net amount of return c. Net rate of return %Answer the following questions by including the appropriate cash flow diagrams, solution, and final answer. 1. A father decides to establish a savings account for his child’s college education on the day his son is born. Any money put into the account will earn an interest rate of 10%. The father will make a series of annual deposits in equal amounts from the child's 1st birthday through the 18th birthday so the child can make four annual withdrawals from the account in the amount of Php 200,000 on each of his 18th, 19th, 20th, and 21st birthdays. Assuming that the first withdrawal will be made on the child’s 18th birthday, calculate the required 18 equal annual deposits.Please refer to the formulas in the lesson and on the following website. Pay particular attention to the examples. Scroll to the bottom to review a table with a list of various formula arrangements that may be helpful in completing this assignment. 1) If you deposit $4,000 today in a bank account and the interest is compounded annually at 10 percent, what will be the value of this investment: a. five years from now? b. ten years from now? c. fifteen years from now? d. twenty years from now? 2) If a business manager deposits $12,000 in a savings account at the end of each year for twenty years, what will be the value of her investment: a. at a compounded rate of 12 percent? b. at a compounded rate of 18 percent? 3) The chief financial officer of a home health agency needs to determine the present value of a $60,000 investment received at the end of year 15. What is the present value if the discount rate is 5%? 4) After completing her residency, an obstetrician plans to invest $9,000…